Another Monday… Another “Game-Changing” Deal

by Martin Denholm, Senior Editor

Monday is Merge Day.

A few weeks ago, the market saw the busiest day of deal-making in three months, as the news-wires lit up with news of several big takeover announcements, including Walt Disney (NYSE: DIS) buying Marvel (NYSE: MVL).

It happened again the following week. In fact, over a 10-day period, more than $40 billion worth of deals were announced.

And even as the third quarter winds down, the pace is still frenetic in the M&A market.

Today saw technology equipment firm Xerox (NYSE: XRX) announce a $6.4 billion deal to buy Affiliated Computer Services (NYSE: ACS) – its biggest acquisition on record.

Xerox investors greeted the news with a collective “ugh,” as shares of the photocopying and business supplies giant spiraled down by 17%. While perhaps

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Marvel Entertainment, Inc. (MVL) shares rallied after the news of its acquisition by Walt Disney Company (DIS) hit the market. The shares of Marvel jumped to close at $48.37 on August 31, 2009 -- up nearly 25.2% from the previous day’s close. Walt Disney would acquire Marvel for cash and stock for approximately $4 billion. Marvel shareholders would receive in aggregate $30 per share in cash and approximately 0.745 Disney stock for each Marvel stock they own. This amounts to $50 per share, which is 29.4% higher to Marvel's closing stock price of $38.65 on August 28, and is 36 times the Zacks Consensus Estimate of $1.38 per share in earnings for fiscal year 2009. The purchase of Marvel Entertainment is to be Disney's largest acquisition since 2006, when it had purchased Pixar Animation Studios for $7.4 billion. The deal is expected to close by ...